**Exhibit10.31**

 

**EMPLOYMENT AND NONCOMPETITION AGREEMENT**

** **

THISEMPLOYMENT AND NONCOMPETITION AGREEMENT (the “Agreement”) is made and enteredinto as of July 19, 2005, by and among Avocent Huntsville Corp., anAlabama corporation (“AHC” or “Employer”), Avocent Corporation, a Delawarecorporation, and Edward H. Blankenship****(the “Employee”).

 

**RECITALS**

 

WHEREAS,Avocent Corporation and its affiliates including Avocent International Ltd.,Avocent Huntsville Corp., Avocent Redmond Corp., and OSA Technologies, Inc.(Avocent Corporation and its affiliates are collectively referred to in thisAgreement as “Avocent”) are engaged in the business of designing,manufacturing, and selling connectivity solutions for enterprise data centers,service providers, and financial institutions; and

 

WHEREAS,Employer desires to employ the Employee and the Employee is willing to acceptsuch employment by Employer on the terms and subject to the conditions setforth in this Agreement.

 

**AGREEMENT**

 

THEPARTIES HERETO AGREE AS FOLLOWS:

 

# 1.                                       DUTIES.  During the term of this Agreement, theEmployee agrees to be employed by Employer and to serve Avocent as its SeniorVice President of Finance, Chief Financial Officer, and Assistant Secretary.  The Employee shall devote such of hisbusiness time, energy, and skill to the affairs of Avocent and Employer asshall be necessary to perform the duties of Senior Vice President of Finance,Chief Financial Officer, and Assistant Secretary.  The Employee shall report to the ChiefExecutive Officer of Employer and Avocent Corporation and to the Boards ofDirectors of Employer and Avocent Corporation, and at all times during the termof this Agreement, the Employee shall have powers and duties at leastcommensurate with his position as Senior Vice President of Finance, ChiefFinancial Officer, and Assistant Secretary of Avocent Corporation.

#  

# 2.                                       TERM OF EMPLOYMENT.

#  

## 2.1                                 DEFINITIONS. For purposes of this Agreement the following terms shall have thefollowing meanings:

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### (a)                                  “TERMINATION FOR CAUSE” shall mean terminationby the Employer or Avocent Corporation of the Employee’s employment with theEmployer or Avocent by reason of the Employee’s willful dishonesty towards,fraud upon, or deliberate injury or attempted injury to, the Employer orAvocent or by reason of the Employee’s willful material breach of thisAgreement which has resulted in material injury to the Employer or Avocent.

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### (b)                                 “TERMINATIONS OTHER THAN FOR CAUSE” shallmean termination by the Employer or Avocent Corporation of the Employee’semployment with the Employer or Avocent (other than in a Termination for Cause)and shall include any constructive

 

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termination of the Employee’s employment by reason ofmaterial breach of this Agreement by the Employer or Avocent, such constructivetermination to be effective upon thirty (30) days written notice from theEmployee to the Employer of such constructive termination.

 

### (c)                                  “VOLUNTARY TERMINATION” shall meantermination by the Employee of the Employee’s employment with the Employer orAvocent other than (i) constructive termination as described in subsection 2.1(b),(ii) “Termination Upon a Change in Control” asdescribed in Section 2.1(e), and (iii) termination by reason of theEmployee’s disability or death as described in Sections 2.5 and 2.6.

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### (d)                                 “TERMINATION UPON A CHANGE IN CONTROL” shallmean (i) a termination by the Employee of the Employee’s employment withthe Employer or Avocent within six (6) months following any “Change inControl” or (ii) any termination by the Employer or Avocent Corporation ofthe Employee’s employment with the Employer or Avocent (other than aTermination for Cause) within eighteen (18) months following any “Change inControl.”

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### (e)                                  “CHANGE IN CONTROL” shall mean, after thedate of this Agreement, any one of the following events:

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#### (i)                                     Any person (other than Avocent Corporation)acquires beneficial ownership of Employer’s or Avocent Corporation’s securitiesand is or thereby becomes a beneficial owner of securities entitling suchperson to exercise twenty-five percent (25%) or more of the combined votingpower of Employer’s or Avocent Corporation’s then outstanding stock.  For purposes of this Agreement, “beneficialownership” shall be determined in accordance with Regulation 13D under theSecurities Exchange Act of 1934, or any similar successor regulation or rule;and the term “person” shall include any natural person, corporation,partnership, trust or association, or any group or combination thereof, whoseownership of Employer’s or Avocent Corporation’s securities would be requiredto be reported under such Regulation 13D, or any similar successorregulation or rule.

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#### (ii)                                  Within any twenty-four (24) month period, theindividuals who were Directors of Avocent Corporation at the beginning of anysuch period, together with any other Directors first elected as directors ofAvocent Corporation pursuant to nominations approved or ratified by at leasttwo-thirds (2/3) of the Directors in office immediately prior to any such election,cease to constitute a majority of the Board of Directors of AvocentCorporation.

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#### (iii)                               Avocent Corporation’s stockholders approve:

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##### (1)                                  any consolidation or merger of AvocentCorporation in which Avocent Corporation is not the continuing or survivingcorporation or pursuant to which shares of Avocent Corporation common stockwould be converted into cash, securities or other property, other than a mergeror consolidation of Avocent Corporation in which the holders of AvocentCorporation’s common stock immediately prior to the merger or consolidationhave substantially the same proportionate ownership and voting control of thesurviving corporation immediately after the merger or consolidation; or

#####  

##### (2)                                  any sale, lease, exchange, liquidation or othertransfer (in one transaction or a series of transactions) of all orsubstantially all of the assets of Avocent Corporation.

 

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Notwithstandingsubparagraphs (e)(iii)(1) and (e)(iii)(2) above, the term “Changein Control” shall not include a consolidation, merger, or other reorganizationif upon consummation of such transaction all of the outstanding voting stock ofAvocent Corporation is owned, directly or indirectly, by a holding company, andthe holders of Avocent Corporation’s common stock immediately prior to thetransaction have substantially the same proportionate ownership and votingcontrol of such holding company after such transaction.

 

## 2.2                                 BASIC TERM. The term of employment of the Employee by the Employer shall be for theperiod beginning on the date of this Agreement, and ending on December 31,2007, unless terminated earlier pursuant to this Section 2.  At any time before December 31, 2007,the Employer and the Employee may by mutual written agreement extend theEmployee’s employment under the terms of this Agreement for such additionalperiods as they may agree.

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## 2.3                                 TERMINATION FOR CAUSE.  Termination ForCause may be effected by the Employer at any time during the term of thisAgreement and shall be effected by thirty (30) days written notification to theEmployee from the Boards of Directors of Employer and Avocent Corporationstating the reason for termination.  UponTermination For Cause, the Employee immediately shall be paid all accrued salary,bonus compensation to the extent earned, vested deferred compensation, if any(other than pension plan or profit sharing plan benefits which will be paid inaccordance with the applicable plan), any benefits under any plans of Employeror Avocent in which the Employee is a participant to the full extent of theEmployee’s rights under such plans, accrued vacation pay and any appropriatebusiness expenses incurred by the Employee in connection with his dutieshereunder, all to the date of termination, but the Employee shall not be paidany other compensation or reimbursement of any kind, including withoutlimitation, severance compensation.

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## 2.4                                 TERMINATION OTHER THAN FOR CAUSE.  Notwithstanding anything else in thisAgreement, the Employer may effect a Termination OtherThan For Cause at any time upon giving thirty (30) days written notice to theEmployee of such termination.  Upon anyTermination Other Than For Cause, the Employee shall immediately be paid allaccrued salary, bonus compensation to the extent earned, vested deferredcompensation, if any (other than pension plan or profit sharing plan benefitswhich will be paid in accordance with the applicable plan), any benefits underany plans of Employer or Avocent in which the Employee is a participant to thefull extent of the Employee’s rights under such plans, accrued vacation pay andany appropriate business expenses incurred by the Employee in connection withhis duties hereunder, all to the date of termination, and all severancecompensation provided in Section 4.2, but no other compensation orreimbursement of any kind.

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## 2.5                                 TERMINATION BY REASON OF DISABILITY.  If, during the term of this Agreement, theEmployee, in the reasonable judgment of the Board of Directors of AvocentCorporation, has failed to perform his duties under this Agreement on accountof illness or physical or mental incapacity, and such illness or incapacitycontinues for a period of more than six (6) consecutive months, theEmployer shall have the right to terminate the Employee’s employment hereunderby delivery of written notice to the Employee at any time after such six monthperiod and payment to the Employee of all accrued salary, bonus compensation tothe extent earned, additional bonus compensation in an amount equal to theaverage annual bonus earned by the Employee as an employee of AvocentCorporation and its affiliates and predecessors in the two (2) yearsimmediately preceding the date of termination, vested deferred compensation, ifany (other than pension plan or profit sharing plan benefits which will be paidin accordance with the applicable

 

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plan), any benefits underany plans of Employer or Avocent in which the Employee is a participant to thefull extent of the Employee’s rights under such plans (including having thevesting of any awards granted to the Employee under any AHC or Avocent stockoption plans fully accelerated), accrued vacation pay and any appropriatebusiness expenses incurred by the Employee in connection with his dutieshereunder, all to the date of termination, with the exception of medical anddental benefits which shall continue through the expiration of this Agreement,but the Employee shall not be paid any other compensation or reimbursement ofany kind, including without limitation, severance compensation.

 

## 2.6                                 TERMINATION BY REASON OF DEATH.  In the event of the Employee’s death duringthe term of this Agreement, the Employee’s employment shall be deemed to haveterminated as of the last day of the month during which his death occurs andthe Employer shall pay to his estate or such beneficiaries as the Employee mayfrom time to time designate all accrued salary, bonus compensation to theextent earned, vested deferred compensation, if any (other than pension plan orprofit sharing plan benefits which will be paid in accordance with theapplicable plan), any benefits under any plans of Employer or Avocent in whichthe Employee is a participant to the full extent of the Employee’s rights undersuch plans (including having the vesting of any awards granted to the Employeeunder any AHC or Avocent stock option plans fully accelerated), accruedvacation pay and any appropriate business expenses incurred by the Employee inconnection with his duties hereunder, all to the date of termination, but theEmployee’s estate shall not be paid any other compensation or reimbursement ofany kind, including without limitation, severance compensation.

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## 2.7                                 VOLUNTARY TERMINATION.  Notwithstanding anything else in thisAgreement, the Employee may effect a VoluntaryTermination at any time upon giving thirty (30) days written notice to theEmployer of such termination.  In theevent of a Voluntary Termination, the Employer shall immediately pay allaccrued salary, bonus compensation to the extent earned, vested deferredcompensation, if any (other than pension plan or profit sharing plan benefitswhich will be paid in accordance with the applicable plan), any benefits underany plans of Employer or Avocent in which the Employee is a participant to thefull extent of the Employee’s rights under such plans, accrued vacation pay andany appropriate business expenses incurred by the Employee in connection withhis duties hereunder, all to the date of termination, but no other compensationor reimbursement of any kind, including without limitation, severancecompensation.

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## 2.8                                 TERMINATION UPON A CHANGE IN CONTROL.  In the event of a Termination Upon a Changein Control, the Employee shall immediately be paid all accrued salary, bonuscompensation to the extent earned, vested deferred compensation, if any (otherthan pension plan or profit sharing plan benefits which will be paid inaccordance with the applicable plan), any benefits under any plans of Employeror Avocent in which the Employee is a participant to the full extent of theEmployee’s rights under such plans (including having the vesting of any awardsgranted to the Employee under any AHC or Avocent stock option plans fullyaccelerated), accrued vacation pay and any appropriate business expensesincurred by the Employee in connection with his duties hereunder, all to thedate of termination, and all severance compensation provided in Section 4.1,but no other compensation or reimbursement of any kind.

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# 3.               SALARY, BENEFITS ANDBONUS COMPENSATION.

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## 3.1                                 BASE SALARY. Effective January 1, 2005, as payment for the services to berendered by the Employee as provided in Section 1 and subject to the termsand conditions of

 

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## Section 2, the Employeragrees to pay to the Employee a “Base Salary” at the rate of $200,000.00 perannum, payable in equal bi-weekly installments. The Base Salary for each calendar year (or proration thereof) beginning January 1,2005****shall be determined by the Board ofDirectors of Avocent Corporation upon a recommendation of the Compensation Committee of AvocentCorporation (the “Compensation Committee”), which shall authorize an increasein the Employee’s Base Salary in an amount which, at a minimum, shall be equalto the cumulative cost-of-living increment on the Base Salary as reported inthe “Consumer Price Index for All UrbanConsumers(CPI-U), All Items Index” for South Urban Size A, published by theU.S. Department of Labor (using July 1, 2004, as the base date forcomputation prorated for any partial year).* *The Employee’s Base Salary shallbe reviewed annually by the Board of Directors and the Compensation Committeeof Avocent Corporation.

 

## 3.2                                 BONUSES. The Employee shall be eligible to receive a bonus for each calendar year(or portion thereof) during the term of this Agreement and any extensionsthereof, with the actual amount of any such bonus to be determined in the solediscretion of the Board of Directors of Avocent Corporation based upon its evaluationof the Employee’s performance during such year. All such bonuses shall be payable during the last month of the fiscalyear or within forty-five (45) days after the end of the fiscal year to whichsuch bonus relates.  All such bonusesshall be reviewed annually by the CompensationCommittee of Avocent Corporation.

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## 3.3                                 ADDITIONAL BENEFITS.  During the term of this Agreement, theEmployee shall be entitled to the following fringe benefits:

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### (a)                                  THE EMPLOYEE BENEFITS.  The Employee shall be eligible to participatein such of Avocent’s benefits and deferred compensation plans as are nowgenerally available or later made generally available to executive officers orAvocent, including, without limitation, stock option plans, Section 401(k)plan, profit sharing plans, deferred compensation plan, annual physicalexaminations, dental and medical plans, personal catastrophe and disabilityinsurance, retirement plans and supplementary executive retirement plans, ifany.  For purposes of establishing thelength of service under any benefit plans or programs of AHC or Avocent, theEmployee’s employment with the Employer (or any successor) will be deemed tohave commenced on the date that Employee first commenced employment with AHC,which was July 25, 2002.

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### (b)                                 VACATION. The Employee shall be entitled to vacation in accordance with theAvocent Corporation’s vacation policy but in no event less than three (3) weeksduring each year of this Agreement.

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### (c)                                  LIFE INSURANCE.  For the term of this Agreement and any extensionsthereof, the Employer shall at its expense procure and keep in effect term lifeinsurance on the life of the Employee, payable to such beneficiaries as theEmployee may from time to time designate, in an aggregate amount equal to threetimes the Employee’s Base Salary.  Suchpolicy shall be owned by the Employee or by any person or entity with aninsurable interest in the life of the Employee.

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### (d)                                 REIMBURSEMENT FOR EXPENSES.  During the term of this Agreement, theEmployer or Avocent Corporation shall reimburse the Employee for reasonable andproperly documented out-of-pocket business and/or entertainment expensesincurred by the Employee in connection with his duties under this Agreement inaccordance with Avocent’s standard reimbursement policies.

 

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# 4.                                       SEVERANCE COMPENSATION.

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## 4.1                                 SEVERANCE COMPENSATION IN THE EVENT OF ATERMINATION UPON A CHANGE IN CONTROL.  Inthe event of a Termination Upon a Change in Control, the Employee shall be paidas severance compensation his Base Salary (at the rate payable at the time ofsuch termination) for a period of twelve (12) months from the date of suchTermination Upon a Change in Control, on the dates specified in Section 3.1,and the Employee shall also be paid an amount equal to the average annual bonusearned by the Employee as an employee of Avocent Corporation and its affiliatesand predecessors in the two (2) years immediately preceding the date oftermination.  For any bonus calculationusing the 2003 and/or 2004 calendar year bonus(es)(which were paid in 2004 and 2005, respectively), the bonus paid to Employeefor such year(s) shall be doubled for purposes of this average bonuscalculation.  Notwithstanding anything inthis Section 4.1 to the contrary, the Employee may in the Employee’s solediscretion, by delivery of a notice to the Employer within thirty (30) daysfollowing a Termination Upon a Change in Control, elect to receive from theEmployer a lump sum severance payment by bank cashier’s check equal to thepresent value of the flow of cash payments that would otherwise be paid to theEmployee pursuant to this Section 4.1. Such present value shall be determined as of the date of delivery of thenotice of election by the Employee and shall be based on a discount rate equalto the interest rate of 90-day U.S. Treasury bills, as reported in *The Wall Street Journal* (or similar publication), on thedate of delivery of the election notice. If the Employee elects to receive a lump sum severance payment, AvocentCorporation shall cause the Employer to make such payment to the Employeewithin ten (10) days following the date on which the Employee notifies theEmployer of the Employee’s election.  TheEmployee shall also be entitled to have the vesting of any awards granted tothe Employee under any AHC or Avocent stock option plans fullyaccelerated.  The Employee shall beprovided with medical plan benefits under any health plans of Avocent orEmployer in which the Employee is a participant to the full extent of theEmployee’s rights under such plans for a period of twelve (12) months from thedate of such Termination Upon a Change in Control (even if Employee elects toreceive a lump sum severance payment).

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## 4.2                                 SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATIONOTHER THAN FOR CAUSE.  In the event of aTermination Other Than for Cause, the Employee shall be paid as severancecompensation his Base Salary (at the rate payable at the time of suchtermination) for a period of twelve (12) months from the date of suchtermination, on the dates specified in Section 3.1, and Employee shallalso be paid an amount equal to the average annual bonus earned by the Employeeas an employee of Avocent Corporation and its affiliates and predecessors inthe two (2) years immediately preceding the date of termination. For anybonus calculation using the 2003 and/or 2004 calendar year bonus(es)(which were paid in 2004 and 2005, respectively), the bonus paid to Employeefor such year(s) shall be doubled for purposes of this average bonuscalculation.  Notwithstanding anything inthis Section 4.2 to the contrary, the Employee may in the Employee’s solediscretion, by delivery of a notice to the Employer within thirty (30) daysfollowing a Termination Other Than for Cause, elect to receive from theEmployer a lump sum severance payment by bank cashier’s check equal to thepresent value of the flow of cash payments that would otherwise be paid to theEmployee pursuant to this Section 4.2. Such present value shall be determined as of the date of delivery of thenotice of election by the Employee and shall be based on a discount rate equalto the interest rate on 90-day U.S. Treasury bills, as reported in *The Wall Street Journal* (or similar publication), on thedate of delivery of the election notice. If the Employee elects to receive a lump sum severance payment, AvocentCorporation shall cause the Employer to make such payment to the Employeewithin ten (10) days following the date on which the Employee notifies theEmployer of the Employee’s election.  The

 

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## Employee shall also beentitled to have the vesting of any awards granted to the Employee under anyAHC or Avocent stock option plans fully accelerated. The Employee shall be providedwith medical plan benefits under any health plans of Avocent or Employer inwhich the Employee is a participant to the full extent of the Employee’s rightsunder such plans for a period of twelve (12) months from the date of suchTermination Other Than for Cause (even if Employee elects to receive a lump sumseverance payment).

 

## 4.3                                 NO SEVERANCE COMPENSATION UNDER OTHERTERMINATION.  In the event of a VoluntaryTermination, Termination For Cause, termination byreason of the Employee’s disability pursuant to Section 2.5, terminationby reason of the Employee’s death pursuant to Section 2.6, the Employee orhis estate shall not be paid any severance compensation.

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# 5.                                       NON-COMPETITIONOBLIGATIONS.  Unless waived or reduced bythe Employer or Avocent, during the term of this Agreement and for a period oftwelve (12) months thereafter, the Employee will not, without the Employer’sand Avocent Corporation’s prior written consent, directly or indirectly, aloneor as a partner, joint venturer, officer, director, employee, consultant,agent, independent contractor or stockholder of any company or business, engagein any business activity in the United States, Canada, Europe, or Asia which issubstantially similar to or in direct competition with any of the businessactivities of or services provided by the Employer or Avocent at suchtime.  Notwithstanding the foregoing, theownership by the Employee of not more than five percent (5%) of the shares ofstock of any corporation having a class of equity securities actively traded ona national securities exchange or on The Nasdaq Stock Market shall not bedeemed, in and of itself, to violate the prohibitions of this Section 5.

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# 6.                                       MISCELLANEOUS.

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## 6.1                                 PAYMENT OBLIGATIONS.  If litigation after a Change in Control shallbe brought to enforce or interpret any provision contained herein, the Employerand Avocent Corporation, to the extent permitted by applicable law and theEmployer’s and Avocent Corporation’s Articles of Incorporation and Bylaws, eachhereby indemnifies the Employee for the Employee’s reasonable attorneys’ feesand disbursements incurred in such litigation.

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## 6.2                                 GUARANTEE. Avocent Corporation hereby unconditional and irrevocable guarantees allpayment obligations of the Employer under this Agreement, including, withoutlimitation, the Employer’s obligations under Sections 2, 3, 4, and 6 hereof.

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## 6.3                                 WITHHOLDINGS. All compensation and benefits to the Employee hereunder shall be reducedby all federal, state, local, and other withholdingsand similar taxes and payments required by applicable law.

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## 6.4                                 WAIVER. The waiver of the breach of any provision of this Agreement shall notoperate or be construed as a waiver of any subsequent breach of the same orother provision hereof.

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## 6.5                                 ENTIRE AGREEMENT; MODIFICATIONS.  Except as otherwise provided herein, thisAgreement represents the entire understanding among the parties with respect tothe subject matter hereof, and this Agreement supersedes any and all priorunderstandings, agreements, plans and negotiations, whether written or oralwith respect to the subject matter hereof,**andany understandings, agreements or obligations respecting any past or futurecompensation, bonuses, reimbursements or other payments to the Employee fromthe Employer or Avocent Corporation.

 

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## All modifications to theAgreement must be in writing and signed by the party against whom enforcementof such modification is sought.

 

## 6.6                                 NOTICES. All notices and other communications under this Agreement shall be inwriting and shall be given by hand delivery or first class mail, certified orregistered with return receipt requested, and shall be deemed to have been dulygiven upon hand delivery to an officer of the Employer or the Employee, as thecase may be, or upon three (3) days after mailing to the respectivepersons named below:

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| If to the Employer/Avocent: | Avocent Corporation    |
|-----------------------------|------------------------|
|                        | 4991 Corporate Drive   |
|                        | Huntsville, AL 35805   |
|                        | ATTN: President        |
|                        |                   |
| With copy to:               | Avocent Corporation    |
|                        | 9911 Willows Road N.E. |
|                        | Redmond, WA 98052      |
|                        | ATTN: General Counsel  |
|                        |                   |
| If to the Employee:         | Edward H. Blankenship  |

 

Anyparty may change such party’s address for notices by notice duly given pursuantto this Section 6.6.

 

## 6.7                                 HEADINGS. The Section headings herein are intended for reference and shallnot by themselves determine the construction or interpretation of thisAgreement.

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## 6.8                                 GOVERNING LAW; VENUE.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Alabama.  The Employee, the Employer, and AvocentCorporation each hereby expressly consents to the exclusive venue of the stateand federal courts located in Huntsville, Alabama, for any lawsuit arising fromor relating to this Agreement.

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## 6.9                                 ARBITRATION. Any controversy or claim arising out of or relating to this Agreement,or breach thereof, shall be settled by arbitration in Huntsville, Alabama, inaccordance with the Rules of the American Arbitration Association, andjudgment upon any proper award rendered by the arbitrators may be entered inany court having jurisdiction thereof. There shall be three (3) arbitrators, one (1) to be chosendirectly by each party at will, and the third arbitrator to be selected by thetwo (2) arbitrators so chosen.  Tothe extent permitted by the Rules of the American Arbitration Association,the selected arbitrators may grant equitable relief.  Each party shall pay the fees of thearbitrator selected by him and of his own attorneys, and the expenses of hiswitnesses and all other expenses connected with the presentation of hiscase.  The cost of the arbitrationincluding the cost of the record or transcripts thereof, if any, administrativefees, and all other fees and costs shall be borne equally by the parties.

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## 6.10                           SEVERABILITY. If a court or other body of competent jurisdiction determines that anyprovision of this Agreement is excessive in scope or otherwise invalid orunenforceable, such provision shall be adjusted rather than voided, ifpossible, and all other provisions of this Agreement shall be deemed valid andenforceable to the extent possible.

 

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## 6.11                           SURVIVAL OF EMPLOYER’S OBLIGATIONS.  The Employer’s and Avocent Corporation’sobligations hereunder shall not be terminated by reason of any liquidation,dissolution, bankruptcy, cessation of business, or similar event relating tothe Employer or Avocent Corporation. This Agreement shall not be terminated by any merger or consolidation orother reorganization of the Employer or Avocent Corporation.  In the event any such merger, consolidationor reorganization shall be accomplished by transfer of stock or by transfer ofassets or otherwise, the provisions of this Agreement shall be binding upon andinure to the benefit of the surviving or resulting corporation or person.  This Agreement shall be binding upon andinure to the benefit of the executors, administrators, heirs, successors andassigns of the parties; provided, however, that except as herein expresslyprovided, this Agreement shall not be assignable either by the Employer (exceptto an affiliate of the Employer (including Avocent Corporation) in which eventthe Employer shall remain liable if the affiliate fails to meet any obligationsto make payments or provide benefits or otherwise) or by the Employee.

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## 6.12                           COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of whichtaken together shall constitute one and the same Agreement.

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## 6.13                           INDEMNIFICATION.  In addition to any rights to indemnificationto which the Employee is entitled to under the Employer’s or AvocentCorporation’s Articles of Incorporation and Bylaws, the Employer and AvocentCorporation shall indemnify the Employee at all times during and after the termof this Agreement to the maximum extent permitted under the corporation laws ofthe State of Delaware and any other applicable state law, and shall pay theEmployee’s expenses in defending any civil or criminal action, suit, orproceeding in advance of the final disposition of such action, suit, orproceeding, to the maximum extent permitted under such applicable state laws.

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## 6.14                           INDEMNIFICATION FOR SECTION 4999 EXCISETAXES.  In the event that it shall bedetermined that any payment or other benefit paid by the Employer or Avocent Corporationto or for the benefit of the Employee under this Agreement or otherwise, butdetermined without regard to any additional payments required under thisAgreement (the “Payments”) would be subject to the excise tax imposed by Section 4999of the Internal Revenue Code (the “Excise Tax”), then the Employer and AvocentCorporation shall indemnify the Employee for such Excise Tax in accordance withthe following:

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### (a)                                  The Employee shall be entitled to receive anadditional payment from the Employer and/or Avocent Corporation equal to (i) onehundred percent (100%) of any Excise Tax actually paid or payable by theEmployee in connection with the Payments, plus (ii) an additional paymentin such amount that after all taxes, interest and penalties incurred inconnection with all payments under this Section 2(a), the Employee retainsan amount equal to one hundred percent (100%) of the Excise Tax.

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### (b)                                 All determinations required to be made underthis Section shall be made by the Avocent Corporation’s primary independentpublic accounting firm, or any other nationally recognized accounting firmreasonably acceptable to Avocent Corporation and the Employee (the “AccountingFirm”).  Avocent Corporation shall causethe Accounting Firm to provide detailed supporting calculations of itsdeterminations to the Employer and the Employee.  All fees and expenses of the Accounting Firmshall be borne solely by the Employer. For purposes of making the calculations required by this Section, theAccounting Firm may make reasonable assumptions and approximations concerningapplicable taxes

 

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### and mayrely on reasonable, good faith interpretations concerning the application ofSections 280G and 4999 of the Internal Revenue Code, provided the AccountingFirm’s determinations must be made with substantial authority (within themeaning of Section 6662 of the Internal Revenue Code). The payments towhich the Employee is entitled pursuant to this Section shall be paid bythe Employer and/or Avocent Corporation to the Employee in cash and in full notlater than thirty (30) calendar days following the date the Employee becomessubject to the Excise Tax.

 

INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dayand year first above written.

 

 
| ** ** | **AVOCENT HUNTSVILLE CORP.:** |
|------------|-------------------------------|
|       |                          |   |
|       |                          |   |
|       | By:                           | /s/ John R. Cooper |   |
|       | Its:                          | Chairman and CEO |   |
|       |                          |   |
|       |                          |   |
| ** ** | **AVOCENT CORPORATION:**      |
|       |                          |   |
|       |                          |   |
|       | By:                           | /s/ John R. Cooper |   |
|       | Its:                          | Chairman and CEO |   |
|       |                          |
|       |                          |
| ** ** | **EMPLOYEE:**                 |
|       |                          |   |
|       | /s/ Edward H. Blankenship     |   |
|       | Edward H. Blankenship         |   |
|            |                               |  |  |  |  |

 

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